Electronic payments are becoming a preferred method of payment because they offer advantages to the user not present with traditional physical payments. With a physical payment, the user is required to carry the funding instrument and present the funding instrument when ready to make a payment. Examples of physical funding instruments include cash, checks, credit cards, debit cards, coupons, gift certificates, gift cards, and the like. These can take up space in a user pocket, purse, or wallet. To reduce space, the consumer may not carry all funding instruments all the time, resulting in the possibility that a desired funding instrument is not available when the consumer is ready to use it at a point of sale (POS). Such physical funding instruments may also be lost or stolen. Thus, physical “wallets” can be cumbersome, inconvenient, and prone to loss.
To remedy this, mobile devices have been and are being used to make payments through payment providers, such as PayPal, Inc. of San Jose, Calif. Such payment providers typically allow a consumer to make a payment through the user's mobile device, such as through the use of barcodes, communication between the payment provider and the merchant, and other methods. After authentication and/or authorization, the payment is made through a user account with the payment provider, where the account is funded through a funding source, such as the user's bank or credit card.
However, while mobile payments may be convenient, they are also prone to fraudulent activity. For example, if a user's mobile phone is lost or stolen, an unauthorized user may make a fraudulent payment through the mobile phone. As such, payment providers use various fraud detection tools to ensure a payment is properly made by an authorized user. One such tool is determining where the payment request is being made. If the user resides in a certain city or state and has made consistent payments within a certain location, but then one or more payment requests are made from another region or country, the payment provider may deny the payment or require additional authentication before approving the payment. This may be inconvenient for authorized users attempting to make a payment while traveling or at an unfamiliar (to the payment provider) location.
Therefore, a need exits for a payment solution that overcomes the disadvantages described above.